his guest commentary orginally appeared as a Bloomberg-BNA Insights Water Law & Policy Monitor™. View the online version here.
by Colleen Coyle
The compact reached by the Confederated Salish and Kootenai Tribes (CSKT), the Montana Reserved Water Rights Compact Commission (RWRCC), and the U.S. for tribal reserved water rights was the most hotly debated bill of the 2015 Montana legislative session and has attracted national attention.
This negotiated agreement settles the water rights of the Confederated Salish and Kootenai Tribes on and off the Flathead Indian Reservation. These water rights have a priority date of either July 16, 1855, or “time immemorial,” depending on the type of right. They must be resolved either through negotiated settlement or through litigation in Montana’s statewide general stream adjudication. Because of their early priority date, and the extensive geography covered by these rights, the tribes’ water rights have the potential to negatively impact existing state-based water rights and future water availability throughout the state.
The compact recognizes tribal rights on and off the reservation, in exchange for the tribes’ agreement to relinquish all other claims within the state. For example, the compact quantifies for the tribes a right from the Flathead River in the amount of 229,383 acre-feet per year diverted, 128,158 acre-feet per year consumed. The tribes agreed not to place a call for curtailment of state-based, non-irrigation water rights. It establishes a joint state-tribal board to administer water use on the reservation, providing non-tribal irrigators a role in water management and implementation, and does not require irrigators to relinquish their filed water rights claims or affect their ability to pursue those claims in the Montana General Stream Adjudication.
The proposed compact is 1,400 pages long, a decade in the making and bewilderingly complex. Essentially, it helps to lay out the water rights of the tribe[s] and water users like farmers and ranchers. It provides $55 million in state money to upgrade the reservation’s water systems. And it settles questions about water claims that go back to 1855, when the government guaranteed the tribes’ wide-reaching fishing rights across much of western Montana.
Several hundred supporters and opponents traveled to the state’s capitol to testify at the legislative hearings in February and April. Individuals, representatives of water user groups, all of the state’s major agricultural interests, municipalities, tribal members, business and industrial interests and power generators were among those who testified, including many members of state Tea Party chapters appearing as opponents.
Opponents contended the compact represented a federal takeover of water and would reduce the water available to irrigators, particularly those in close proximity to the reservation. Legislators and others who opposed the bill ratifying the compact objected to its recognition of off-reservation instream flow water rights to protect aboriginal rights for fisheries. The opponents asserted these off-reservation rights are not scientifically based or well grounded in law or history. Many legislators who opposed the compact asserted that the Legislature should be able to amend the substantive terms of the compact and disagreed with the compact being presented as a “take it or leave it” deal.
Supporters, including the compact parties and the major agricultural groups in the state, contended the compact will provide future protections for state water users because it resolves questions regarding the extent and amount of the tribal water rights. Settlement of the rights in a compact would thus contribute to a quicker resolution of the ongoing water rights adjudication, provide economic certainty and protect property values. Supporters also contended that the compact provides access to a new supply of water for the region, which would fuel economic growth and result in an infusion of money to create jobs and boost the local economy. The compact’s provisions also provide funding to accomplish repairs and upgrades to irrigation project facilities, to the benefit of tribal and non-tribal irrigators.
The Senate hearing was ended after five hours of testimony from both sides, while the House hearing lasted for 10 hours.
A dozen Republicans joined all 41 Democrats to pass the bill ratifying the compact, after 13 attempts to amend the bill failed in the state House. The bill passed in the Senate by 31-19 on Feb. 26 of this year. It was signed into law by Montana Gov. Steve Bullock (D) on April 24. Like all water rights compacts, whether among states or with Native American tribes, this one must also be approved by the U.S. Congress.
The CSKT compact was the last of seven Montana tribal compacts to go before the Legislature and it was by far the most difficult to negotiate because it also addresses tribal rights outside the boundaries of the reservation.
Two compacts, for the Fort Belknap and Blackfeet reservations, still await congressional approval. They were passed in 2001 and 2009, respectively but have been held up for various reasons. Three other compacts were passed by the Legislature in the 1990s, and they took up to three years to win congressional approval.
Whether the CSKT compact, which has far more significant ramifications on a large portion of the state, gets more expeditious treatment by Congress remains to be seen. The CSKT are the only tribes in Montana with off-reservation treaty fishing rights affecting thousands of miles of rivers and streams. This profoundly impacts the diversion of water for irrigation and the maintenance of in-stream flows for fisheries.4
What Happens Next?
Once a compact is ratified by Congress, the tribe must approve it, and then it must be decreed by the Montana Water Court. The compact becomes effective upon ratification by all three parties and entry of the water court’s decree.
A lawsuit is pending in state district court, filed by irrigators opposed to the CSKT Compact, contending that a two-thirds majority in the state Legislature was necessary to ratify it. As Alan Mikkelsen, former irrigation district director, pointed out in an op-ed piece arguing for the compact, referring to the irrigators’ track record in court, “Their combined record approaches 0-30 in litigation involving water against the tribes.”
The goal of the compact is to resolve all of the tribes’ water-related claims, including the value of the compromised or relinquished water rights claims. This will require a federal contribution to settlement acceptable to the tribes and the federal government, and to some extent, the state of Montana. As a result, the tribes and state will work with the federal government to accomplish a settlement, which will have to be approved by Congress.
Although a federal negotiating team participated in compact negotiations, the federal monetary contribution to settlement is determined through the federal ratification process. It is difficult to determine how long this process will take or the speed at which federal agencies and Congress will complete this process. The U.S. Department of the Interior and Department of Justice will review and evaluate the tribes’ damages claims to facilitate Congress in considering the compact and the settlement. New rules suggest that the parties will proceed within the next 12 months.
On Feb. 26, Rep. Rob Bishop (R-Utah) submitted a report on behalf of the House Natural Resources Committee, which he chairs, informing the Justice Department and the Interior Department of the new process the committee intends to follow when considering future Indian water rights settlements. The letter states:
G]iven the longstanding policy of the United States that disputes regarding Indian water rights should be resolved through negotiated settlement rather than through litigation, both of your Departments play key roles in negotiating and developing settlements regarding these claims before they are ever considered by Congress…. Importantly, settlements, if crafted correctly, can provide relief to the United States from burdensome legal obligations and benefit all American taxpayers… The Committee recognizes that the Executive branch is charged with implementing existing Indian water rights settlement criteria and procedures designed to meet these goals… Put simply, your Departments must convey support for and forward the settlements and the proposed authorizing legislation, specifically including federal spending levels, before any Committee consideration takes place.
The process recommended by Bishop, although not a procedure required by the Senate, involves seven steps: 1) a statement from each department affirming that the settlement resolution adheres to current criteria and procedures; 2) an affirmation that a settlement represents a net benefit to the American taxpayer as compared to the consequences of not settling; 3) a conveyance by the Attorney General’s office that all parties have agreed to the settlement; 4) the text needed to codify the settlement; 5) consent by the Department of Justice to be available to testify if the legislative text is considered by the committee; 6) a list by both departments of the legal claims being settled; and 7) a declaration that such settlements and proposed legislation shall not include financial authorizations for claims already settled by Congress or claims that have no legal basis.
This process places additional responsibility on the executive branch regarding the congressional process, and the CSKT Compact will be one of the first settlements to proceed under these steps. Based on this process, a change in administration will likely delay settlement evaluation and negotiation.
Montana Rep. Ryan Zinke (R) sits on the House Natural Resources Committee and will likely play a key role during deliberations. He has stated that he is following the compact very closely at the state and federal levels, and that he is hoping for a timely process.
Recognizing that Congress has a history of moving too slowly on tribal water compacts, Zinke has indicated he hopes Congress can take action on the CSKT Compact within a single two-year session.
Montana Sen. Steve Daines (R) has not indicated with certainty whether he will support passage of the compact. Montana’s other senator, Jon Tester (D), has supported the negotiated settlement throughout the process and indicated that he will seek bipartisan support as he works to move the compact forward through the congressional process.
Under the terms of the compact, the tribes may withdraw from the settlement if Congress fails to ratify within four years of state ratification. The tribes contend that they cannot be expected to make concessions and waive claims if the other parties are not committed to approving and funding the settlement. CSKT must also ratify the compact before it is finalized, but because Congress can create additional requirements before it appropriates federal funding for implementation, CSKT’s process will likely occur after congressional approval.
Litigation in State District Court
On April 20, less than a week after the Legislature passed the bill ratifying the compact, the opponents filed their complaint challenging the validity of the legislative action. The plaintiffs are irrigators on the Flathead Joint Board of Control, which oversees irrigation districts on the Flathead Reservation. The state legislation (S.B. 262), which implements the CSKT compact, includes a waiver of immunity from claims for the state and tribes, but it passed the Senate on a 31-19 vote and the House on a 53-47 vote.
The lawsuit contends that the state constitution requires a two-thirds majority vote from the House and Senate in order for the state to receive sovereign immunity from litigation. The House passed SB 262 on a simple majority vote.
Bullock, Attorney General Tim Fox, and members of the Legislature are named defendants in the case. Plaintiffs also sought an injunction to prevent Gov. Bullock from signing S.B. 262, but he signed it into law April 24. The remaining portion of the litigation is pending before Judge James Manley in Polson, Mont. But the case only addresses the question of whether the Legislature validly passed the compact, not the implementation or merits of the agreement.
A response filed by the Montana Attorney General’s Office states that the plaintiffs’ claims regarding damage and harm are “patently frivolous,” because they are related to “highly speculative ‘injury’ from a law that will likely not be implemented for years.” The state of Montana filed a motion to dismiss the case, which was denied Dec. 2. Discovery is ongoing.
Compact Implementation Technical Team
The compact provides that upon ratification, the parties are required to establish a compact implementation technical team (CITT) and a compact management committee (CMC). The CITT advises the operator of the Flathead Indian Irrigation Project, which was built by the Bureau of Indian Affairs and is managed by that agency, on the implementation of operational improvements, rehabilitation and betterment of Project facilities and on adaptive management. The CMC provides policy and administrative oversight of the technical team. The director and a surface water hydrologist from the Montana Department of Natural Resources and Conservation (DNRC) serve as representatives on the CITT. In addition to the CITT members appointed by the parties to the compact, the agreement also provides for a fourth seat for the Flathead Indian Irrigation Project Operator and the option of a fifth seat that may be filled by a representative selected by all irrigators served by the project. The first meeting of the CITT was held Dec. 10.
Montana Water Court Process
The Montana Water Court must also approve the CSKT Compact. Former Chief Water Judge C. Bruce Loble was interviewed about this unique process by Time magazine. He said the water court “settles disputes between farmers and ensures that the state is fulfilling its commitments to its Native American tribes. Technically, [the Chief Water Judge] can even overrule the President. Once Congress approves and the President signs a water compact, it is returned to the Montana Water Court for final approval.”
If the CSKT Compact receives congressional approval, it will then be filed with the Montana Water Court, which will provide notice of the compact proceedings and allow water users who could be adversely effected the opportunity to object. The water court reviews compacts to determine if they are “fundamentally fair, adequate and reasonable,” and whether they conform to applicable law. The court cannot modify a compact, only approve or reject it.
Because predicting a final outcome of the claim filing, objection, and litigation process is so difficult, there are significant benefits to negotiating water right settlements. These can address issues such as water administration and funding, but a water court decision, issued after the claims are filed and all objections are litigated to finality, would set forth only the findings of fact, conclusions of law, and elements of water rights as dictated by Sec. 85-2-234, MCA. The water court has recognized that a water right decision litigated through the objection process is less flexible than a negotiated compact settlement.
The parties to this compact, and the negotiators to compacts generally, enjoy considerable freedom in reaching the compacted results and may achieve results through the compact process that are more favorable to their interests than would be achieved through litigation. If other parties claiming reserved water rights proceed to litigation on the merits before the Montana Water Court, the Court will have to draw hard lines and resolve ambiguous legal precedent on many of the issues which are given broad brush in this Compact review (Case WC 92-1).
If the compact process fails at any of these steps, Montana statutes provide that these reserved water right claims will be litigated in the Montana Water Court. Some who oppose the revised compact have indicated support for resolving tribal reserved water rights through litigation. It is important to consider the history leading to the creation of the negotiation process for reserved rights when evaluating this potential approach.
The U.S. began litigating Indian water rights for Montana tribes when it filed two lawsuits in 1975 on behalf of the Northern Cheyenne and Crow Tribes and two lawsuits in 1979 on behalf of the Fort Peck tribes in federal court. In 1979, congressional hearings recorded widespread concern by non-Indians about the consequences of this litigation.
In 1979, largely because of the federal lawsuits, the Montana Legislature enacted the statewide water rights adjudication effort.
If the CSKT Compact fails to make it through Congress, the tribal ratification, and the Montana Water Court, then pursuant to Montana statutes, all CSKT Indian reserved water right claims must be litigated at the Montana Water Court. CSKT filed thousands of claims in the event the process fails by the statutory deadline of July 1, 2015 in order to preserve their rights to litigate. If litigation must proceed, these new filings must be given treatment similar to that given all other filings. According to Montana law, they will be prima facie proof of their contents, which effectively means that the burden would fall upon those who object to the tribal claims to prove that they are incorrect. Montana’s legal standard is different than other states, such as Wyoming and Idaho, that have litigated Indian reserved water rights, and this shifting of the burden of proof gives the CSKT claims in Montana a very strong position in litigation compared to reserved water rights claims that have been litigated in other states.
The Montana Water Court has recognized that “[w]hether by adjudication or by negotiation, determining the scope and extent of Indian reserved water rights has proved difficult at best.” This case discusses several of the Supreme Court decisions, stating that:
As articulated by the United States Supreme Court, the Reserved Water Rights Doctrine is vague and open-ended and has been construed both broadly and narrowly by subsequent federal and state courts. After nearly one hundred years of legislation, litigation, and policy making, there are still no bright lines clearly and consistently delineating the Doctrine. Most of the legal issues inherent in the Doctrine remain unsettled and hotly debated and are now complicated by decades of distrust and competing policies. (italics added by the author)
When the Montana Water Court approved the legislatively approved compacts of the Fort Peck and Rocky Boy Reservations in 2001 and 2002, it concluded:
All negotiations and adjudications quantifying Indian reserved water rights involve extensive and complex disputed issues of fact and law. They inherently involve competing interests in a scarce resource, the allocation of which must be determined by ambiguous, perhaps anachronistic law, evolving governmental policies, and increasingly sophisticated science–all amidst rapidly changing circumstances, within the confines of a complex adjudication process. That is precisely the incentive for negotiation and settlement of complex water right adjudications.17
Numerous commenters have recognized the benefits of negotiating Indian reserved water rights during the past 30 years. The compact process to negotiate the CSKT reserved water right claims in Montana has been far more contentious than any other that Montana has experienced but would likely pale in comparison to the massive litigation that would occur if the process fails. The water rights adjudication process in Montana has been proceeding for more than 30 thirty years and has cost nearly $90 million in state funding so far, not counting expenses by litigants including federal agencies, local governments, and individual water users. Montana water users testified that they expect to spend far more in litigation if the compact fails. The compact was supported in the legislative process by a remarkable array of water users, agricultural interests, business groups, cities and towns, and utilities, in addition to the tribes and other compact parties. The next steps ahead will determine whether the 10 years’ time and thousands of hours devoted to the negotiation process are sufficient to overcome the issues raised by compact opponents.
4 The CSKT confederation falls under the Stevens Treaty. Starting in 1905, and continuing today, the United States Supreme Court, federal courts, and several state courts have upheld the right of Stevens Treaty tribes to fish at usual and accustomed places and to hunt on open and unclaimed lands off of their reservations. More recently, some courts have recognized the right of Stevens Treaty tribes to preserve and protect those off-reservation locations, including maintaining instream flows where necessary to preserve their treaty rights.